14 regions identified for potential hydrogen, carbon storage hub locations

A nonpartisan energy research organization has identified 14 optimal locations for future hydrogen and carbon management hubs across the US, an early step before the Department of Energy begins doling out billions of dollars from the infrastructure bill for hub funding.

According to the Great Plains Institute's Atlas of Carbon and Hydrogen Hubs for US Decarbonization, released Feb. 1, the 14 most ideal locations were evaluated against a set of criteria the measured each regions preexisting industrial and natural resources – criteria that roughly corresponds to how the Energy Department is expected to judge hub funding applications.

Each of the 14 locations have a high concentration of industrial emitters, high fossil fuel use, facilities that qualify for 45Q tax credits, existing hydrogen and ammonia production, and large naturally occurring geologic formations for hydrogen or CO2 storage. Regions are also evaluated for their existing commodity distribution infrastructure, such as highways, railroads and waterways, and for their existing fossil fuel distribution infrastructure for hydrogen blending.

With all these ingredients, these hubs "can achieve beneficial economies of scale, thus enabling investment breakeven for industrial capture retrofit and maximizing the amount of carbon capture achieved," said Dane McFarlane, director of research at the Great Plains Institute.

The 14 locations include: Houston, the Louisiana coast, the Permian Basin, Oklahoma, Kansas, the Rocky Mountain region, northern Utah, the Pacific Northwest, Northern California, Southern California, the Bakken region in North Dakota, Illinois, the Michigan-Ohio border and Western Pennsylvania.

Hydrogen, carbon hub funding

The $8 billion allocated for future hydrogen hubs was provided by the Biden administration's Infrastructure Investment and Jobs Act, which will support the creation of at least four regional hydrogen hubs. Signed by the president Nov. 15, the bill gives the DOE 180 days to issue a request for proposals, which would initiate an application process through which regional groups would compete for a slice of the $8 billion.

Competition for these dollars is expected to be steep. Last year, the department issued a request for information from local groups interested in facilitating hydrogen hubs and received more than 200 responses.

The infrastructure bill also provided $12.1 billion to support new carbon management technologies, including money to build out regional CO2 transportation and storage infrastructure networks. Through low-interest loans and cost-share grants, the funding will help the DOE support the development of large-scale commercial geologic storage sites across the country.

Feb. 1 was the DOE's deadline for another request for information in which the department asked companies and organizations for information in carbon management technologies.

Many regional groups across the US have already announced intent to form local carbon hubs. The Center for Houston's Future, for instance, has been actively advocating for a hydrogen hub by touting the Gulf Coast region's advantages. And on Jan. 25, New Mexico Governor Michelle Grisham backed a state bill that would push for a regional hydrogen hub and create tax incentives for low-carbon hydrogen production.

According to S&P Global Platts price assessments, the cost of producing hydrogen using PEM electrolysis (including capex) in Southern California was $4.75/kg as of Jan. 30, while the cost of producing hydrogen using steam methane reforming (including capex) without carbon capture was $1.56/kg.

Prices are slightly lower in the US Gulf Coast region, where hydrogen produced using PEM electrolysis cost $3.95/kg and hydrogen produced using steam methane reforming without carbon capture cost $1.30/kg.